Strategic CIO // IT Strategy
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3/8/2006
12:46 PM
Paul McDougall
Paul McDougall
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By The Numbers: IBM Getting Bigger In India, Smaller In The U.S.

Whoa! In the course of reporting that IBM plans to move all the design and development of its business consulting offerings to India, one company exec told me that IBM's current employment growth rate in the country will continue "for quite some time." So let's look at what that means.

Whoa! In the course of reporting that IBM plans to move all the design and development of its business consulting offerings to India, one company exec told me that IBM's current employment growth rate in the country will continue "for quite some time." So let's look at what that means.At the start of 2005, IBM had about 23,000 workers in India. As of January 2006, that number had ballooned to 39,000. That's a growth rate of 70%! At that rate, IBM would have more than 66,000 Indian employees in 2007, and more than 112,000 in 2008.

At present, IBM employs about 150,000 workers in the U.S.--half of its total workforce. However, ruling out the possibility that the company would double its payroll at a time when its revenues are flat, there's obviously going to be some--as the suits call it--"rebalancing." In many ways, this has already begun. IBM tends not to announce sweeping reductions, a la GM or Ford. It does, however, make a lot of cuts in small doses.

How does IBM's workforce break down in a couple of years? Here's my prediction: 30% U.S., 30% India, and 40% elsewhere, with much of that "elsewhere" being China. In other words, expect IBM to have at least as many workers in India as it does in the U.S. by 2009.

Is that good or bad? If you're a U.S. tech worker, it's not so good--unless you have some solid business and management skills. If you're an Indian IT worker, an IBM customer, or an IBM shareholder, it's probably good news. India still offers the best bang for the buck in terms of the programming dollar. And more and more, it's becoming a center of innovation. IBM is smart to leverage that.

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